Purchasing departments increasingly understand the realities of marketing communication agencies. They are also increasingly effective in managing the expectations of marketing departments. They are a good mediator between the two parties - agencies and marketing departments. They modify tender processes and systems for purchasing marketing services. Thanks to this, they achieve better results with greater approval of the agencies. As a result, agencies can record lower costs of tender proceedings. They also feel more partnership between the parties.
Such conclusions could be reached by listening to speeches during the conference Polzak Marketing, organized by the Polish Association of Logistics and Purchasing Managers (PSML) and the Association of Marketing Communication SAR. As the organizers emphasized, the event was aimed at expanding competencies in the field of purchasing marketing services. And indeed, it was so. Agencies from the stage pointed to good and not necessarily good practices. Exactly in the same spirit were the presentations of the shopping experts. A strong wind of change could be felt. Sometimes even a hurricane. We are starting to understand each other better, respect each other and find more and more examples of how cooperation and transparency are mutually beneficial.
Here are some of the conclusions from the conference:
Decision-makers should be among the decision-makers from the beginning of the tender process.
The heads of procurement clearly note that excluding decision-makers from the selected stages of the procurement process may create misunderstandings and additional work not only for the agency, but also for the customer, i.e. the marketing and purchasing departments. The offer may be incomplete, misguided. This reduces the quality of offers and may significantly prolong the selection process. In many cases, the tender may be cancelled and reopened. It does not pay off for anyone. Neither agencies nor customers.
Giving a budget in the brief limits randomness and helps each of the parties.
Purchasing departments are increasingly saying that they are changing their strategy in the context of budgeting. They often refer to budget slippage as a negative factor influencing the length of a tender procedure. They also note that if agency A brings a campaign with a budget of PLN 500,000 and agency B with a budget of PLN 2,000,000, they cannot compare apples to apples. Harmonising offers at this stage takes a lot of time and energy. As a result, deadlines are often postponed and campaigns start later than expected.
The argument of losing a negotiation parameter is also not necessarily logical. If the brief includes a budget of PLN 1,000,000,000 and specific objectives, the agencies will not necessarily bring offers for this amount. There will probably be ideas for achieving the goal at a lower cost. Often with a higher margin. In such a situation, each of the parties may win. The client will spend less money. The agency will make a higher profit. Everyone will be happier.
A debriefing meeting should be held with only one agency.
Meetings with all the agencies in one room will save time on the part of the briefing marketing department. However, it will not bring much to the achievement of a better offer. Agencies will rather remain silent or ask safe questions that do not indicate the methodology and direction of thinking. Therefore, if marketing wants to achieve a super effect, it must invest its time in this effect. It is exactly like with ROI - Return On Investement. There is no Return without Investment.
A directional session can bring miracles after narrowing down the number of agencies.
For more complex tendering processes, if there are two remaining agencies on the playing field, directional sessions with the agencies should be organized. In this part of the process, the agencies should receive a detailed feedback on what is good in the offer, what needs to be improved, what elements are probably burdened with a high risk factor and what are the concerns. In addition, the marketing department can devote time to a workshop during which it will work on the concept with the agency. Not only will the final offer be more complete, but also the client will have a chance to determine how to work with the agency.
Rejection fee or fee for participation in the tender
Regardless of what we call it, the agency will be more motivated if it receives remuneration reducing the costs of the tender procedure. The IKEA example shows concrete figures. Agencies that dropped out in the first creative stage received 5,000 PLN, those that dropped out in the final additionally 15,000 PLN. It probably did not equal the costs with the income, but it effectively reduced the cost and strongly increased the motivation of the agency.
The tender procedure is a huge cost for the agency.
Since we use numbers, it is worth knowing that the costs of preparing an offer depending on the type of tender and the type of marketing service according to SKM SAR is an average of 41,500 PLN. In 2016, 655 tenders were recorded in the SAR tendering system and in the media, with an average of 5 agencies. Therefore, the total cost of tenders for the industry is PLN 135,912,500... And yet many tenders could not be identified.
It's time to prepare a bid.
The agency cannot prepare a sensible offer within a few days. We do not have people in our drawers. We don't have them hidden in the basement waiting in the combat gutter for every phone call from a new customer. Teams from month to month have more and more planned calendars for many days and weeks ahead. Therefore, real thinking customers give three or even four weeks to prepare a presentation of the offer.
RFI is also a workload for the agency...
... therefore it is good if purchasing departments use established market patterns (it is worth asking the SAR for a model RFI inquiry). Thanks to this, agencies will minimize the so-called "tailor-made sewing" for the customer. It is also important at this stage to provide criteria excluding the agency. Sometimes it happens after a document is prepared by the agency and on the lips of the excluded consultants the question "but why didn't they say it earlier? An example may be the deletion of agencies working for competition. Notification of this at the beginning reduces costs for many companies.
The dialogue continues. Purchasing department representatives talk to agency representatives. They refine documents and guides. Market and awareness are maturing. We are all eagerly awaiting: PR, Events, Full Service, Branding, Incentive Travel, Media, Digital and Production!